On November 3, 2016 GTx, Inc. (Nasdaq: GTXI) reported financial results for the third quarter ended September 30, 2016 and provided an update on the Company’s clinical development activities (Press release, GTx, NOV 3, 2016, View Source;p=RssLanding&cat=news&id=2219024 [SID1234516223]). The Company has three ongoing Phase 2 clinical trials: two trials evaluating enobosarm as a potential treatment for women with advanced androgen receptor positive breast cancer and another trial assessing enobosarm as a potential treatment for stress urinary incontinence in postmenopausal women.

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"We made excellent progress during the quarter, including demonstrating clinical benefit in Stage 1 of the 9 mg dose group which enabled us to advance this dose group to the second and final stage of the ER+/AR+ breast cancer trial," said Robert J. Wills, Ph.D., Executive Chairman of GTx. "In addition we are pleased with the continued financial support of key existing investors who participated in our equity offering last month which enables us to continue to pursue key milestones in the coming months for our breast cancer and stress urinary incontinence programs, as well as our SARD technology."

Corporate Highlights and Anticipated Milestones

Enobosarm in Breast Cancer: The Company’s lead product candidate, a selective androgen receptor modulator (SARM), is being developed as a targeted treatment for two advanced breast cancer indications: (i) estrogen receptor positive (ER+) and androgen receptor positive (AR+) breast cancer, and (ii) AR+ triple negative breast cancer (TNBC). For both clinical trials, the primary efficacy endpoint is a determination of clinical benefit (CB), which is defined as a complete response, partial response or stable disease.

ER+/AR+ breast cancer: The Company has an ongoing Phase 2 clinical trial of enobosarm (GTx-024) in women with advanced, ER+/ AR+ breast cancer. Patients receive orally-administered enobosarm (9 mg or 18 mg) daily for up to 24 months. The first stage of evaluation will be assessed among the first 18 evaluable patients for each cohort. If at least 3 of 18 patients per cohort achieve CB at week 24, the trial will proceed to the second stage of enrollment. The primary efficacy objective of the trial is clinical benefit response following 24 weeks of treatment, which, under the clinical trial protocol, will be demonstrated if at least 9 of 44 evaluable patients achieve CB. Those patients demonstrating CB at week 24 will continue to receive treatment for up to 24 months. The two dose cohorts in the trial will be treated independently for the purpose of assessing efficacy.

The Company announced in September 2016 that the 9 mg dose group demonstrated clinical benefit in Stage 1 of the trial allowing the 9 mg cohort to advance to Stage 2;
The Company expects to announce top-line results from Stage 1 of the 9 mg cohort before the end of 2016.
AR+ TNBC: The Company has an ongoing open-label, multi-center, multinational Phase 2 clinical trial to evaluate the efficacy and safety of orally administered enobosarm in up to 55 women with advanced, AR+ TNBC. Patients will receive 18 mg of enobosarm once daily for up to 12 months. Stage 1 of the trial will be assessed among the first 21 evaluable patients. If at least 2 of 21 patients achieve clinical benefit at week 16, then the trial will proceed to Stage 2 of enrollment of up to a total of 41 evaluable patients. The primary efficacy objective of the trial is clinical benefit response following 16 weeks of treatment in 41 evaluable patients.

The Company expects to have sufficient data from Stage 1 of the trial in the first quarter of 2017 to determine if patient enrollment should continue into Stage 2 of the trial.
SARMs in Non-Oncologic Indications: The Company is exploring SARMs as potential treatments for both stress urinary incontinence (SUI) and Duchenne muscular dystrophy (DMD), a rare disease characterized by progressive muscle degeneration and weakness.

Stress Urinary Incontinence: Enrollment in the Phase 2 proof-of-concept clinical trial of 3 mg of enobosarm in women with SUI is ongoing. This is the first clinical trial to evaluate a SARM for SUI. The Company believes that developing an oral therapy to treat the growing number of women who suffer a diminished quality of life from stress urinary incontinence presents a unique commercial opportunity, especially since current therapies may sometimes involve invasive procedures. The Company expects to have data from the trial during the first half of 2017.

Duchenne muscular dystrophy: Preclinical studies have confirmed the beneficial effects from SARMs in mice genetically altered to simulate DMD, compared to control groups. The Company continues to pursue a potential strategic collaboration with biopharma companies experienced in orphan drug development.

SARDs in Prostate Cancer: Our Selective Androgen Receptor Degrader (SARD) technology is being evaluated as a potentially novel treatment for men with castration-resistant prostate cancer (CRPC), including those who do not respond or are resistant to currently approved therapies. The Company believes that its SARD compounds will degrade multiple forms of the androgen receptor, including AR splice variants, such as AR-V7, along with mutant versions of the receptor.

Castration-Resistant Prostate Cancer: Lead SARD compounds are undergoing further preclinical development, including formulation and pharmacokinetic studies. The Company plans to initiate its first human clinical trial with a SARD in 2017.

Third Quarter and Nine Months 2016 Financial Results

In October 2016, the Company completed a registered direct offering of its common stock resulting in net proceeds of approximately $13.6 million. Under the terms of the offering, the Company sold 17.3 million shares of its common stock at a purchase price of $0.81 per share, which was the consolidated closing bid price of the Company’s common stock on October 11, 2016. The investors in the offering consisted of certain existing shareholders of the Company, including J.R. Hyde, III, its largest shareholder and Lead Director of the Company’s Board of Directors (the "Board"), Robert J. Wills, the Board’s Executive Chairman, and Marc S. Hanover, the Company’s Chief Executive Officer and a member of the Board.
As of September 30, 2016, cash and short-term investments were $13.4 million, which does not include the proceeds noted above from our recent equity financing, compared to $29.3 million at December 31, 2015.
Research and development expenses for the quarter ended September 30, 2016 were $4.6 million compared to $3.8 million for the same period of 2015.
General and administrative expenses were $2.3 million for the quarter ended September 30, 2016 compared to $2.0 million for the same period of 2015.
The net loss for the quarter ended September 30, 2016 was $6.9 million compared to net income of $34.9 million for the same period in 2015. Net income for the quarter ended September 30, 2015 included a non-cash gain of $40.7 million due to the change in the fair value of the Company’s warrant liability. During the first quarter of 2016, the Company recorded a non-cash reclassification of this warrant liability to stockholders’ equity due to modification of these warrants. No adjustments to the fair value of these warrants are required subsequent to the first quarter of 2016.
The net loss for the nine months ended September 30, 2016 was $10.9 million compared to a net loss of $15.5 million for the same period of 2015. The nine months ended September 30, 2016 included a non-cash gain of $8.2 million due to the change in the fair value of the Company’s warrant liability, recorded during the first quarter of 2016. The nine months ended September 30, 2015 included a non-cash gain of $352,000 due to the change in fair value of the Company’s warrant liability.
GTx had approximately 141.9 million shares of common stock outstanding as of September 30, 2016. Additionally, there remain warrants outstanding to purchase approximately 64.3 million shares of GTx common stock at an exercise price of $0.85 per share.

vTv Therapeutics has filed a 10-Q – Quarterly report [Sections 13 or 15(d)] with the U.S. Securities and Exchange Commission (Filing, 10-Q, vTv Therapeutics, 2017, NOV 3, 2016, View Source [SID1234521321]).

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On November 3, 2016 Acceleron Pharma Inc. (NASDAQ:XLRN), a clinical stage biopharmaceutical company focused on the discovery, development and commercialization of innovative therapeutics to treat serious and rare diseases, reported that data from five abstracts on the investigational protein therapeutics, luspatercept and sotatercept, will be presented at the 58th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition being held in San Diego, California on December 3-6, 2016 (Press release, Acceleron Pharma, NOV 3, 2016, View Source [SID1234516201]).

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The oral and poster presentations will include data from Phase 2 studies with luspatercept, which is being developed under a global partnership with Celgene for the treatment of myelodysplastic syndromes and beta-thalassemia. The clinical presentations at the conference will include updated information beyond that which is contained in the abstracts now available online on the ASH (Free ASH Whitepaper) conference website.

Oral presentations

Title:
Luspatercept Increases Hemoglobin, Decreases Transfusion Burden and Improves Iron Overload in Adults with Beta-Thalassemia (Abstract #851)
Session: 112. Thalassemia and Globin Gene Regulation: Clinical Advances in Thalassemia
Date: Monday, December 5th
Time: 3:45 p.m. PST (San Diego Convention Center, Room 7AB)

Title:
Phase-2 Study of Sotatercept (ACE-011) in Myeloproliferative Neoplasm-Associated Myelofibrosis and Anemia (Abstract #478)
Session: 634. Myeloproliferative Syndromes: Clinical: Clinical Trials with Agents Other Than JAK Inhibitors
Date: Sunday, December 4th
Time: 5:15 p.m. PST (Marriott Marquis San Diego Marina, Marriott Grand Ballroom Salons 8-9)

Poster presentations

Title:
Pharmacokinetics and Exposure-Response of Luspatercept in Patients with Anemia Due to Low- or Intermediate-1-Risk Myelodysplastic Syndromes (MDS): Preliminary Results from Phase 2 Studies (Abstract #1990)
Session: 637. Myelodysplastic Syndromes – Clinical Studies: Poster I
Date: Saturday, December 3rd
Time: 5:30 – 7:30 p.m. PST (San Diego Convention Center, Hall GH)

Title:
Luspatercept Increases Hemoglobin and Reduces Transfusion Burden in Patients with Low-Intermediate Risk Myelodysplastic Syndromes (MDS): Long-Term Results from Phase 2 PACE-MDS Study (Abstract #3168)
Session: 637. Myelodysplastic Syndromes – Clinical Studies: Poster II
Date:
Sunday, December 4th
Time: 6:00 – 8:00 p.m. PST (San Diego Convention Center, Hall GH)

Title:
Pharmacokinetics and Exposure-Response of Luspatercept in Patients with Beta-Thalassemia: Preliminary Results from Phase 2 Studies (Abstract #2463)
Session: 112. Thalassemia and Globin Gene Regulation: Poster II
Date: Sunday, December 4th
Time: 6:00 – 8:00 p.m. PST (San Diego Convention Center, Hall GH)

The luspatercept posters and presentation slides will be available in the "Science" section on Acceleron’s website (www.acceleronpharma.com).

About Luspatercept

Luspatercept is a modified activin receptor type IIB fusion protein that acts as a ligand trap for members in the Transforming Growth Factor-Beta (TGF-beta) superfamily involved in the late stages of erythropoiesis (red blood cell production). Luspatercept regulates late-stage erythrocyte (red blood cell) precursor cell differentiation and maturation. This mechanism of action is distinct from that of erythropoietin (EPO), which stimulates the proliferation of early-stage erythrocyte precursor cells. Acceleron and Celgene are jointly developing luspatercept as part of a global collaboration. Phase 3 clinical trials are underway to evaluate the safety and efficacy of luspatercept in patients with myelodysplastic syndromes (the "MEDALIST" study) and in patients with beta-thalassemia (the "BELIEVE" study). For more information, please visit www.clinicaltrials.gov.

About Sotatercept

Sotatercept is an activin receptor type IIA fusion protein that acts as a ligand trap for members in the Transforming Growth Factor-Beta (TGF-β) superfamily involved in fibrosis, vascular calcification, bone mineral density and late stage erythropoiesis (red blood cell production). Acceleron and Celgene are jointly developing sotatercept as part of a global collaboration. Sotatercept is currently in multiple Phase 2 investigator initiated trials. For more information, please visit www.clinicaltrials.gov.

On November 3, 2016 ImmunoGen, Inc. (Nasdaq: IMGN), a leader in the expanding field of antibody-drug conjugates (ADCs) for the treatment of cancer, reported that new preclinical data on the Company’s novel IGN ADCs, IMGN632 and IMGN779, will be presented at the upcoming American Society of Hematology (ASH) (Free ASH Whitepaper) annual meeting, which is being held December 3-6, 2016 in San Diego, CA (Press release, ImmunoGen, NOV 3, 2016, View Source [SID1234516225]).

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IMGN632, a CD123-targeting ADC and IMGN779, a CD33-targeting ADC, both use ImmunoGen’s new family of indolino-benzodiazepine cancer-killing agents called IGNs. ImmunoGen designed IGN payloads to alkylate DNA without crosslinking it. Data being presented at ASH (Free ASH Whitepaper) will demonstrate that DNA-alkylating IGNs are ultra-potent, yet provide increased tolerability compared with DNA crosslinking versions.

"Accelerating our earlier-stage portfolio with an emphasis on our IGN ADCs is one of ImmunoGen’s strategic priorities, and we believe the IMGN632 and IMGN779 preclinical data being presented at ASH (Free ASH Whitepaper) further demonstrate why we are excited about the potential of these programs," said Richard Gregory, Ph.D., executive vice president and chief scientific officer of ImmunoGen.

In an oral presentation, the Company will report preclinical data demonstrating the activity of IMGN632 in multiple acute myeloid leukemia (AML) models and patient samples at concentrations far below levels that affect normal bone marrow cells, suggesting the potential for efficacy in AML patients in the absence of or with limited myelosuppression. In a separate poster presentation, preclinical data for IMGN632 will be reported demonstrating prolonged survival in AML xenograft models. Preclinical data from a combination study of IMGN779 with a PARP inhibitor, demonstrating enhanced activity in several AML models including patient derived tumor cells and a disseminated AML xenograft model, will also be presented in an investigator poster presentation.

A Phase 1 trial of IMGN779 as monotherapy in AML is ongoing with the first clinical data expected to be reported in 2017. ImmunoGen intends to submit an IND application and initiate clinical testing of IMGN632 in 2017.

Oral Presentation
Title: "A CD123-Targeting Antibody-Drug Conjugate (ADC), IMGN632, Designed to Eradicate Acute Myeloid Leukemia (AML) Cells While Sparing Normal Bone Marrow Cells"

Oral presentation, session #616: Monday, December 5, presentation time 11:45am PT. Abstract #768.
Poster Presentations
Title: "IMGN632: A CD123-Targeting Antibody-Drug Conjugate (ADC) with a Novel DNA-Alkylating Payload, Is Highly Active and Prolongs Survival in Acute Myeloid Leukemia (AML) Xenograft Models"

Poster session #616: Sunday, December 4, 6:00-8:00pm PT. Abstract #2832.
Title: "Combining IMGN779, a Novel Anti-CD33 Antibody-Drug Conjugate (ADC), with the PARP Inhibitor, Olaparib, Results in Enhanced Anti-Tumor Activity in Preclinical Acute Myeloid Leukemia (AML) Models"

Poster session #616: Saturday, December 3, 5:30-7:30pm PT. Abstract #1645.
Data will also be presented on agents which use ImmunoGen’s maytansinoid ADC technology, including IMGN529 and Biotest’s indatuximab ravtansine (BT062).

Additional information, including abstracts, can be found at www.hematology.org.

On November 3, 2016 Arbutus Biopharma Corporation (Nasdaq:ABUS), an industry-leading Hepatitis B Virus (HBV) therapeutic solutions company, reported its third quarter 2016 unaudited financial results and provided a corporate update (Press release, Arbutus Biopharma, NOV 3, 2016, View Source [SID1234516256]).

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"This was an important quarter as we reported interim results from our ARB-1467 Phase II trial demonstrating significant HBsAg reduction in chronically infected HBV patients. These promising multi-dose data are the first of their kind for an RNAi HBV product candidate, and we plan to release additional data from this trial by year-end," said Dr. Mark J. Murray, Arbutus’ President and CEO. "We are focused on our strategy of developing a combination therapy, which is supported by our cash runway and potential opportunities to monetize our proprietary lipid nanoparticle (LNP) platform delivery technology."

Recent Highlights and Developments

In September, Arbutus presented interim clinical results from the first two cohorts of the ongoing ARB-1467 Phase II multi-dose trial in chronically infected HBV patients. Cohorts 1 and 2 enrolled patients with hepatitis B e-antigen (HBeAg) negative chronic HBV infection and single dose results demonstrate signification reductions in serum hepatitis B surface antigen (HBsAg). Multiple dose results from Cohort 1 show a step-wise, additive reduction in serum HBsAg.

Abstracts and oral presentations announced for the 2016 American Association for the Study of Liver Diseases (AASLD). Presentations will include preclinical combination data from studies with Arbutus’ proprietary HBV pipeline candidates AB-423 (capsid inhibitor) with ARB-1740 (RNAi).

Partnership with the Hepatitis B Foundation to support the patient storytelling campaign, designed with the goal of raising awareness about chronic HBV, a significant global unmet medical need and the leading cause of hepatocellular carcinoma.

In August 2016, we entered into a lease agreement for approximately 35,000 square feet of space in Warminster, Pennsylvania. This facility includes a research and development laboratory and will represent Arbutus’ primary U.S. site.
Upcoming Milestones

Nov 2016: AASLD presentations on preclinical data, including results from preclinical combination studies of proprietary pipeline candidates
4Q16: ARB-1467 multi-dose HBsAg reduction data from Phase II trial Cohort 2
4Q16: File IND (or equivalent) for core protein/capsid assembly inhibitor
4Q16: File IND (or equivalent) for ARB-1740 (RNAi)
1H17: Additional ARB-1467 Phase II data
Financial Results

As at September 30, 2016, Arbutus had cash, cash equivalents and short-term investments of $149.7 million, as compared to cash, cash equivalents and short and long-term investments of $191.4 million at December 31, 2015.

Net loss

The net loss for Q3 2016 was $19.6 million ($0.37 per common share) as compared to a net loss of $29.0 million ($0.58 per common share) for Q3 2015. The net loss for the nine months ended September 30, 2016 was $165.5 million ($3.15 per common share) as compared to a net loss of $55.9 million ($1.28 per common share) for the nine-months ended September 30, 2015.

Non-GAAP Net Loss

The non-GAAP net loss for Q3 2016 was $16.6 million ($0.31 loss per common share) as compared to a non-GAAP net loss of $0.5 million ($0.01 per common share) for Q3 2015. The non-GAAP net loss for the nine-months ended September 30, 2016 was $45.0 million ($0.86 loss per common share) as compared to a non-GAAP net loss of $22.1 million ($0.51 loss per common share) for the nine-months ended September 30, 2015. The non-GAAP net loss has been adjusted to exclude:

non-cash compensation expense of $3.0 million for the three-month period and $29.0 million for the nine-month period included in research, development, collaborations and contracts expenses, and general and administrative expenses in connection with certain share repurchase provisions arising from the merger with Arbutus Inc., described below.
non-cash impairment charge of $91.4 million ($156.3 million net of deferred income taxes of $64.9 million) for the nine-month period on intangible assets related to the discontinuance of the ARB-1598 program in the Immune Modulator drug class, as well as a delay for additional exploration of the biology of the cccDNA Sterilizer drug class.
Revenue

Revenue was $0.8 million for Q3 2016 as compared to $4.1 million for Q3 2015.

Q3 2015 revenue includes revenue from Monsanto and DoD contracts for which collaboration revenue ceased in Q4 2015.

In November 2014, Arbutus entered into a collaboration with Dicerna for the use of its technology to develop, manufacture, and commercialize products related to the treatment of PH1. In September 2016, Dicerna announced the discontinuance of its DCR-PH1 program. As such, the Company has recognized the remaining $0.6 million of the upfront payment of $2.5 million into licensing fee revenue as well as $0.09 million in research services provided to Dicerna in the three months ended September 30, 2016.

Research, Development, Collaborations and Contracts Expenses

Research, development, collaborations and contracts expenses were $15.7 million in Q3 2016 as compared to $16.4 million in Q3 2015.

R&D expenses decreased during Q3 2016 as compared to Q3 2015 as the Company’s collaboration programs with the DoD, Monsanto, and Dicerna have wound down or ended since September 30, 2015. Arbutus also continues to incur incremental costs related to an increase in activities for the research and preclinical HBV programs, focusing on advancing the development of candidates to support future clinical combination studies.

R&D compensation expense increased in Q3 2016 as compared to Q3 2015 due to an increase in the number of employees in support of the Company’s expanded portfolio of product candidates and from its merger with Arbutus Inc.

General and Administrative

General and administrative expenses were $3.7 million in Q3 2016 as compared to $7.7 million in Q3 2015.

The decrease in general and administrative expenses is primarily due a decrease in non-cash compensation expense recorded related to the expiry of repurchase rights effective Q2 2016, due to the departure of two of the four former Arbutus Inc. founders in June 2016. Non-cash compensation expense related to expiry of repurchase rights recorded in general and administrative expense was $1.5 million in Q3 2016 compared to $4.2 million in Q3 2015.

Impairment of Intangible Assets

In Q3 2015, Arbutus recorded an estimated impairment charge of $38.0 million based on the Company’s decision to discontinue its cyclophilin program, OCB-030.

Other Income (Losses)

On January 1, 2016, the Company’s functional currency changed from the Canadian dollar to the U.S. dollar based on an analysis of changes in the primary economic environment in which Arbutus operates. The Company expects to incur substantial expenses and hold cash and investment balances in Canadian dollars, and as such, will remain subject to risks associated with foreign currency fluctuations. During Q3 2016, Arbutus recorded a foreign exchange loss of $0.8 million, which is primarily an unrealized loss related to a depreciation in the value of our Canadian dollar funds from the previous period, relative to our U.S. dollar functional currency. This compares to a foreign exchange gain of $11.8 million in Q3 2015.

The aggregate decrease in fair value of the Company’s common share purchase warrants was $0.01 million in Q3 2016 as compared to a decrease in the fair value of common share purchase warrants outstanding of $2.0 million in Q3 2015. The decrease is a result of a decrease in the Company’s share price from the previous reporting date.

The company recorded an income tax benefit in Q3 2015 of $15.2 million due to the decrease in deferred tax liability resulting from the impairment charge recorded in the quarter, as discussed above.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions)

September 30, 2016 December 31, 2015

Cash and cash equivalents $ 26.6 $ 166.8
Short-term investments 123.1 14.5
Accounts receivable 0.4 1.0
Other current assets 1.7 1.6
Long-term investments - 10.1
Property and equipment, net 4.1 3.2
Intangible assets 196.3 352.6
Goodwill 162.5 162.5
Total assets $ 514.7 $ 712.3
Accounts payable and accrued liabilities 7.1 8.8
Total deferred revenue 0.0 1.1
Warrant liability 0.3 0.9
Liability-classified options 0.9 -
Contingent consideration 8.3 7.5
Deferred tax liability 81.5 146.3
Total stockholders’ equity 416.6 547.7
Total liabilities and stockholders’ equity $ 514.7 $ 712.3

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in millions)
Three Months
Ended
September 30, Nine Months Ended
September 30,
2016 2015 2016 2015

Total revenue $ 0.7 $ 4.1 $ 1.7 $ 12.2
Operating expenses
Research, development, collaborations and contracts 15.7 16.4 44.1 36.6
General and administrative 3.7 7.7 34.7 18.1
Depreciation of property and equipment 0.3 0.2 0.8 0.4
Acquisition costs - - - 9.7
Impairment of intangible assets - 38.0 156.3 38.0
Loss from operations (19.0 ) (58.2 ) (234.2 ) (90.6 )
Other income (losses) (0.6 ) 14.0 3.9 19.5
Income tax benefit - 15.2 64.9 15.2
Net loss $ (19.6 ) $ (29.0 ) $ (165.4 ) $ (55.9 )
Cumulative translation adjustment - (10.1 ) - (19.2 )
Comprehensive loss $ (19.6 ) $ (39.1 ) $ (165.4 ) $ (75.1 )

UNAUDITED GAAP TO NON-GAAP RECONCILIATION: NET LOSS AND NET LOSS PER SHARE
(in millions, except per share amounts)

Three Months Ended
September 30 Nine Months Ended
September 30
2016
2015 2016 2015
GAAP net loss $ (19.6 ) $ (29.0 ) $ (165.4 ) $ (55.9 )
Adjustment:
Compensation expense of expiring repurchase
provision rights 3.0 5.7 29.0 11.0
Impairment of intangible assets - 38.0 156.3 38.0
Income tax benefit - (15.2 ) (64.9 ) (15.2 )
Non-GAAP net loss $ (16.6 ) $ (0.5 ) $ (45.0 ) $ (22.1 )
GAAP net loss per common share $ (0.37 ) $ (0.57 ) $ (3.15 ) $ (0.64 )
Non-GAAP net loss per common share $ (0.31 ) $ (0.01 ) $ (0.86 ) $ (0.51 )

Use of Non-GAAP Financial Measures

The Company’s consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) on a basis consistent for all periods presented. In addition to the results reported in accordance with U.S. GAAP, the Company provides additional measures that are considered "non-GAAP" financial measures under applicable SEC rules. These non-GAAP financial measures should not be viewed in isolation or as a substitute for GAAP net loss and basic and diluted net loss per common share.

The company evaluates items on an individual basis, and considers both the quantitative and qualitative aspects of the item, including (i) its size and nature, (ii) whether or not it relates to the Company’s ongoing business operations, and (iii) whether or not the Company expects it to occur as part of its normal business on a regular basis. In the three and nine months ended September 30, 2016, the Company’s non-GAAP net loss and non-GAAP net loss per common share excludes the compensation expense related to the expiration of repurchase provision rights connected with certain common shares issued as part of total consideration for the acquisition of Arbutus Inc., as well as impairment on certain intangible assets. The Company believes that the exclusion of these items provides management and investors with supplemental measures of performance that better reflect the underlying economics of the Company’s business. In addition, the Company believes the exclusion of these items is important in comparing current results with prior period results and understanding projected operating performance.